The new super ISA regme which takes place on July 1st will allow investors for the first time ever to make a money transfer from shares and stocks into cash ISAs. However, this scheme must be treated with caution in order to avoid losing out on the tax benefits from the savings stack.
This rule change will most certainly be welcomed with open arms by people who are soon to retire who may want to cash out and not leave their savings exposed to the stock market. Further, those savers who are getting married or looking to purchase a house will also welcome the scheme as the may want to put aside their gains and protect a chunk of their savings.
However, the most important crucial aspect of the transaction is to avoid simply withdrawing you savings from the investment Isa and depositing it into the cash ISA. Doing this will erode the tax free perks.
The first step in any transaction is foremost to decide where you would like to transfer your money. If you have not taken out a cash Isa so far which started on 6th April then you still have an opportunity to shop around for an account which offers a good interest rate. The rate on instant access accounts tends to be lower although they offer greater flexibility and perhaps less commitment by the saver. The good and competitive rates are handed over to savers who are prepared to lock out their money for a number of years this usually being from one to five years.
If you are however one of those people who have already taken out a cash Isa this year check that is can accept transfers from different ISAs. If you have a fixed rate ISA then there is the possibility that you may be unlikely to be able to add proceeds from shares and stocks.
Next, you are to fill out a transfer form telling your banking institution to transfer money from a shares and stocks ISA. Details of your investment ISA as well as the provider and the number of the account will be necessary. The new ISA provider will then send over a transfer request to the provider of the stocks and shares ISA which will then act according to your instructions. Upon settling the sales and closing fees being deducted the money will be found in the cash new ISA with the provider.